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What They Are Saying: Bipartisan Plans to Reform Medicare Part D


05.31.19

WASHINGTON, DC – Energy and Commerce Chairman Frank Pallone, Jr. (D-NJ) and Republican Leader Greg Walden (R-OR), along with Ways and Means Committee Chairman Richard E. Neal (D-MA) and Republican Leader Kevin Brady (R-TX) recently released bipartisan draft legislation establishing an out-of-pocket limit for Medicare Part D beneficiaries.

Here’s What They Are Saying:

Bloomberg Government: The Democratic and Republican heads of two House committees recently released a draft bill that would cap at $5,100 what seniors on Medicare’s prescription drug benefit would pay out of pocket each year. At the same time, the lawmakers want to reduce the government’s share of spending and are considering putting more of that expense on insurers and drugmakers. Bringing a major public health insurance benefit in line with private insurers that typically offer caps on annual health spending could stand as a landmark achievement for a divided Congress.

POLITICO: The bill would set seniors’ caps based on the current catastrophic threshold in Medicare Part D. Sponsors said it would also modernize incentives in the program, bringing the government’s share of catastrophic coverage from 80 percent to 20 percent over four years, gradually shifting more costs onto plans.

Modern Healthcare: Both these ideas have support in Washington, following both Medicare Payment Advisory Commission recommendations and policy requests from the Trump administration.

Health Affairs: Part D reform is needed, given the growing taxpayer and patient out-of-pocket spending burden for beneficiaries needing high-priced drugs. For example, patient out-of-pocket spending on anticancer medications covered by Part D now averages over $10,000 per year. Most of this spending occurs in the catastrophic phase of the Part D benefit. This means an out-of-pocket cap could provide real financial relief for beneficiaries with serious illnesses.

Healthcare Dive: The expected average out-of-pocket spend for seniors who take specialty cancer drugs orally this year is $10,470, up from $8,794 in 2010, according to a recent JAMA report that analyzes Medicare Part D point of sale spending data from 2010 to 2018. The estimated of out-of-pocket spending on specialty cancer drugs in 2019 is expected to range from $7,220 to as high as $15,472 for the multiple myeloma drug lenalidomide. High drug prices and the insurance benefit design within Medicare Part D leaves seniors exposed to significant costs when purchasing specialty cancer medications, according to the study.

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